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| EPCC.OB > SEC Filings for EPCC.OB > Form 8-K/A on 4-Jun-2008 | All Recent SEC Filings |
4-Jun-2008
Entry into a Material Definitive Agreement, Financial Statements an
On August 3, 2007 the Company acquired Endeavor Canada Corporation ("Endeavor Canada"), an Alberta corporation involved in the exploration and development of oil and gas, for 9,000 shares of the Company Series A Preferred stock and 9,000,000 shares of the Class A Preferred stock of the Company's wholly owned subsidiary, First Endeavor Holdings Inc. Each Series A Preferred share is convertible into one share of the Company's common stock and is entitled to 1,000 votes on any matter submitted to the Company's shareholders for approval. Each Class A Preferred share of First Endeavor Holdings is, at the option of the holder of the shares, convertible into one share of the Company's common stock. Cameron King, a former officer and director of the Company, owned a controlling interest in Endeavor Canada at the time of this transaction and received 6,500 shares of the Company's Series A Preferred stock and 6,500,000 First Endeavor Holdings Class A Preferred shares in exchange for his shares in Endeavor Canada.
On February 1, 2008 the Company entered into an agreement with Mr. King which provided the Company with the option of exchanging all of the Company's interest in Endeavor Canada for the Company's Series A Preferred shares and the Class A Preferred shares of First Endeavor Holdings previously issued to Mr. King.
Endeavor Canada was incorporated in May 2006. Between May 2006 and December 2006 Endeavor Canada acquired oil and gas properties in Alberta, Canada but was otherwise relatively inactive.
As of February 15, 2008 Endeavor Canada had a 100% working interest in one well, a 50% working interest in four wells, a 40% working interest in seven wells and working interests of 25% or less in two wells. As of February 15, 2008 six of the wells were producing a total of approximately 2,540 mcf of gas per month (1,140 mcf of gas net to Endeavor Canada's working interest in these wells) and the remaining eight wells were shut in due to required maintenance or the current price of natural gas.
On February 15, 2008 the option was exercised. As a result, the 6,500 shares of the Company's Series A Preferred stock and the 6,500,000 Class A Preferred shares of First Endeavor Holdings issued to Mr. King were returned to the Company and cancelled and all outstanding shares of Endeavor Canada were transferred to Mr. King.
Number Description
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10.4 Agreement relating to the sale of Endeavor Canada
Corporation is incorporated by reference to Exhibit 10.4
filed with the Company's report on Form 10-KSB for the
year ended December 31, 2007.
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Proforma financial statements reflecting the sale of Endeavor Canada Corporation are attached.
On February 1, 2008, Holloman Energy Corporation (formerly Endeavor Energy Corporation) an exploration stage company (the "Company"), entered into an agreement with its former Chief Executive Officer, Cameron King, which provided the Company the option of exchanging all of its interest in Endeavor Canada Corporation ("Endeavor Canada") for its Series A Preferred shares and the Class A Preferred shares of First Endeavor Holdings, Inc. previously issued to Mr. King in connection with the Company's original acquisition of Endeavor Canada.
On February 15, 2008 the Company exercised its option with Mr. King. As a result, the 6,500 shares of the Company's Series A Preferred stock and the 6,500,000 Class A Preferred shares of First Endeavor Holdings, Inc. issued to Mr. King were returned to the Company and cancelled. All outstanding shares of Endeavor Canada were transferred to Mr. King (the "Divestiture").
The pro-forma consolidated balance sheet has been prepared to reflect the Divesture as if it was effective on December 31, 2007. The statement of operations has been prepared to reflect the statement of operations of the Company for the year ending December 31, 2007 as if the Divesture was effective on August 3, 2007 being the date of acquisition of Endeavor Canada.
These pro-forma consolidated statements should be read in conjunction with the Company's December 31, 2007 audited financial statements as filed on Form 10-KSB with the Securities and Exchange Commission April 15, 2008.
HOLLOMAN ENERGY CORPORATION
(Formerly Endeavor Energy Corporation)
(An Exploration Stage Company)
PROFORMA CONSOLIDATED BALANCE SHEETS
Profroma HEC
Consolidated HEC Post-Divestiture
December 31, 2007 Pro-Forma Adjustments December 31, 2007
----------------- --------------------- -----------------
(a) (b) (c)
ASSETS
CURRENT ASSETS
Cash $ - $ -
Accounts receivable 14,339 (14,339) -
Other receivable 63,386 (63,386) -
Prepaid expenses and deposits 115,147 (115,147) -
--------------- --------- --------- --------- -------------
192,872 -
Equipment, net 14,019 (14,019) -
Oil and gas properties, full cost
method, net of depletion 22,945,468 (574,543) 22,370,925
Deposit on acquisition 639,487 - 639,487
Due from Endeavor Canada - 1,787,052 (1,787,052) -
Refundable deposit 5,044 (5,044) -
--------------- --------- --------- --------- -------------
Total Assets $ 23,796,890 $ 23,010,412
=============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued
liabilities $ 821,903 (615,078) 206,825
Loans payable 585,928 (537,565) 48,363
Due to related parties 1,158,415 (351,504) 806,911
--------------- --------- --------- --------- -------------
2,566,246 1,062,099
Deferred tax liability 6,177,000 6,177,000
Asset retirement obligations 60,692 (60,692) -
--------------- --------- --------- --------- -------------
Total Liabilities 8,803,938 7,239,099
--------------- -------------
STOCKHOLDERS' EQUITY
Authorized (Holloman):
10,000,000 preferred shares, par value
$0.001 per share 150,000,000 common
shares, par value $0.001 per share
Issued and outstanding (Holloman):
9,000 preferred shares 9 (7) 2
81,219,358 common shares 81,219 81,219
Authorized (FEH):
10,000,000 preferred shares, par value
$0.001 150,000,000 common shares, par
value $0.001
Issued and outstanding (FEH):
9,000 preferred shares 9,000 (6,500) 2,500
Additional paid in capital 17,903,746 17,903,746
Accumulated other comprehensive income
(loss) (30,870) (30,870)
Deficit accumulated during the
exploration stage (2,970,152) 2,565,412 (1,787,052) 6,507 (2,185,284)
--------------- --------- ----------- --------- -----------
Total Stockholders' Equity 14,992,952 15,771,313
--------------- -------------
Total Liabilities and
Stockholders' Equity $ 23,796,890 $ 23,010,412
=============== =============
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HOLLOMAN ENERGY CORPORATION
(Formerly Endeavor Energy Corporation)
(An Exploration Stage Company)
PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2007
Profroma HEC
Consolidated HEC Post-Divestiture
31-Dec-07 Pro-Forma Adjustments December 31, 2007
-------------------------
(a) (b) (c)
REVENUE
Oil and gas sales, net
of royalties $ 58,957 $ (58,957) -
----------- ----------- ---------- -------- ----------
GENERAL AND ADMINISTRATIVE EXPENSES
Consulting 185,727 (54,857) 130,870
Depletion, depreciation, and
accretion 47,422 (47,754) (332)
Interest and financing costs 132,375 (131,841) 534
Management fees 65,623 (65,623) -
Office and general 425,655 (239,311) 186,344
Production costs and taxes 122,156 (122,156) -
Professional fees 289,319 (129,614) 159,705
Salaries, wages, and benefits 245,336 (158,670) 86,666
----------- ----------- ---------- -------- ----------
1,513,613 (949,826) 563,787
----------- ----------- ---------- -------- ----------
LOSS BEFORE THE FOLLOWING (1,454,656) 890,869 (563,787)
OTHER ITEMS
Foreign exchange gain/(loss) 92,635 (57,016) 35,619
Interest income 3,280 (3,280) -
Provision for impairment of oil and
gas properties (149,004) 149,004 -
----------- ----------- ---------- -------- ----------
(53,089) 88,708 35,619
----------- ----------- ---------- -------- ----------
NET LOSS FROM DISCONTINUED OPERATIONS - (979,577) (979,577)
GAIN FROM DISPOSAL OF DISCONTINUED
OPERATIONS - 2,565,412 (1,787,052) 6,507 784,867
----------- ----------- ---------- -------- ----------
NET LOSS $(1,507,745) $(722,878)
=========== ==========
BASIC AND DILUTED NET LOSS PER COMMON
SHARE $ (0.02) $ (0.01)
=========== ==========
WEIGHTED AVERAGE NUMBER OF BASIC AND
DILUTED COMMON SHARES OUTSTANDING 63,743,997 63,743,997
=========== ===========
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HOLLOMAN ENERGY CORPORATION
(Formerly Endeavor Energy Corporation)
(An Exploration Stage Company)
NOTES TO PRO-FORMA CONSOLIDATED BALANCE SHEET AND STATEMENT OF OPERATIONS
(a) Elimination of Endeavor Canada's net liabilities The assets and liabilities of Endeavor Canada are eliminated and the net impact is booked as a gain on disposal of discontinued operations recognized in connection with the Divestiture.
(b) Write-off of intercompany account In connection with the Divestiture, the Company has determined that its $1,787,052 intercompany receivable from Endeavor Canada is uncollectible. As a result, this receivable has been written-off resulting in a reduction of the gain recognized from the Divestiture.
(c) Treasury shares retired In exchange for the shares of Endeavor Canada, the Company received and retired 6,500 shares of its Series A Preferred stock and 6,500,000 Class A Preferred shares of its wholly-owned subsidiary, First Endeavor Holdings, Inc. The par value method was used to account for the return of the treasury shares since they were to be cancelled immediately upon their return.
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